The FOBT Debate By Chris Brady, Special to CDC Gaming Reports April 24, 2019 at 2:45 am Whoever first coined the phrase, “FOBTs are the crack cocaine of gambling” has a lot to answer for, as do bookies screaming that they will all become destitute because of legal restrictions on these machines. Both distort, with hyperbole, a debate that cries out for honesty. In their preparations for the curbs on fixed-odds betting terminals (FOBTs) that the British government was about to introduce, bookmakers were talking of closures of as many as 4,500 high street shops, and job losses in the tens of thousands. William Hill alone predicted 900 shop closures and thousands of job losses, and the Guardian newspaper reported that Ladbrokes had already identified more than 70 shops that they would be closing.Only Paddy Power Betfair stood out, but its position was one of pragmatism rather than an acknowledgement of the central tenet of the anti-gambling lobby – that curbing FOBTs would alleviate the pressure on problem gamblers. Paddy Power Betfair’s CEO, Breon Corcoran, conceded that the curbs were needed because the debate, “has become so toxic that only a substantial reduction in FOBT stake limits … will address societal concerns”. He pointed out, correctly, that, “… whilst we are not aware of any evidence which links stake size to problem gambling, we are acutely aware of the increasing reputational damage to the gambling industry that has followed lack of progress in this area.” Twenty years ago, two academics, Alex Blaszczynski and Lia Nower wrote, in a paper, “A Pathways Model of Problem and Pathological Gambling,” that: “At the moment, there is no single conceptual theoretical model of gambling that adequately accounts for the multiple biological, psychological and ecological variables contributing to the development of pathological gambling. Advances in this area are hampered by imprecise deﬁnitions of pathological gambling, failure to distinguish between gambling problems and problem gamblers and a tendency to assume that pathological gamblers form one, homogeneous population with similar psychological principles applying equally to all members of the class.” I subscribe to the view that we effectively remain in that position, having made little real progress towards identifying a universally-accepted definition as to what constitutes problem gambling and problem gamblers. I believe that the “crack cocaine” rhetoric of the anti-gambling lobbies and the media is equally as unhelpful as the bookmakers’ cries of commercial catastrophe. The new FOBT curbs will not significantly help individual gambling addicts (possibly a more helpful term). If their cravings are unfulfilled within the betting shops, they will go elsewhere, such as to arcades and casinos, both of whom, incidentally, lobbied for a cut in FOBT stakes. If gamblers do migrate, they will actually be able to bet on machines that are faster than FOBTs. And although the pay-outs are lower, the increased speed can mean that they are potentially just as addictive. Many experts in the field are not convinced that curbing FOBTs is the answer to what they see as a behavioural issue. Dr Helen Wardle, for example, argues that there has been insufficient evaluation of “such a huge regulatory change …. [t]o better understand the full range of outcomes and impact on people’s behaviour”. The Department of Digital, Culture, Media and Sport has responded by stating that, “This is a significant measure that will help stop extreme losses by vulnerable people and is an important step forward in tackling serious gambling related harm. As has widely been reported, these machines have devastated the lives of many people and their families. They have become a symbol of the worst kinds of high stake, addictive play.” It is difficult to argue with such comments, but they do suggest a public health problem of epidemic proportions. Such rhetoric is a central weapon in the lobbyist’s armoury. And let’s be clear, governments are responsive to public outcries and respond by mimicking the language of the protesters. There becomes, therefore, a circular nature to the conversation. The bookmakers have responded in kind, with overstated protestations. Although a KPMG report commissioned by the Association of British Bookmakers (ABB) predicted that up to 4,500 shops could shut, best estimates from the big bookmakers indicate a toll closer to 2,000. However, it is reasonable to believe that such closures may have been in train even prior to the FOBT curbs. As with other high street outlets, the bookmaking industry was already planning to move punters online. It is equally reasonable to suggest that the FOBT decision merely accelerated the move to virtual gambling. Why should bookmakers be immune from the general high street malaise involving high rents and the ever-growing online competition? As a consequence of the movement online it was inevitable that retail shops in every sector would close. It is no coincidence that in parallel with the predictions of high street closures came requests for rent reductions. Indeed, William Hill sent a letter to each of its 2000+ landlords asking for a rent reduction of 50%, needed, it said, “… [to] help us maintain our position at William Hill as the leading gambling operator on the high street so that our shops can continue to offer a great service to our customers and help maintain the viability of our high streets.” Fifty percent being, perhaps not coincidentally, the average drop in revenue predicted by the industry. Since the introduction of the £2 limit there is no significant evidence of high street devastation. Conversations with local shops do not indicate much change in the behaviour of punters using the FOBTs. Players are either remaining with their favourite FOBT, moving online, or being diverted towards alternative gambling games. One such alternative launched by the bookmakers was an offer of higher-stakes roulette-style games. These new games were immediately condemned by campaigners as “FOBTs by the back door”. To be fair, the games such as Paddy Power’s Pick ‘n’ 36 game, which allows gamblers to place bets on hard copy showing a graphic similar to a roulette table, looked pretty much like a FOBT screen. The game featured a maximum stake of £100, similar to the banned FOBT games. Betfred’s version, a Virtual Cycling game where punters bet on computer-generated cyclists on a circular track, had a maximum pay out of £500. The Gambling Commission reacted by telling the operators to remove the new games. The companies complied, but may still face regulator action. Their rival, William Hill, abandoned plans to launch its own game after a stern warning from the regulator. One area to which the government may well turn its attention is the theory that smartphones have the capacity to be even more addictive than FOBTs. There is currently no legal limit for stakes online. However, given that the laws governing online gambling were generated in a period when internet gambling was in its infancy, it might be wise to engage in a general overhaul of the regulatory interaction in this area between government and the industry. Of course, it is very early to make any concrete judgements or valid predictions about the future of FOBTs. It is important to acknowledge comments such as that of the Labour Shadow Minister for Women and Equalities and Home Affairs, Carolyn Harris, in which she states that “FOBTs are causing huge social harm. People are taking their own lives because of them, families are being torn apart, and children are suffering”. But we must also recognise that banning a single product is not the solution to ending such tragedies. Prohibition doesn’t work and banning the sale of gin, for example, will not alleviate alcoholism. The FOBT debate is a distraction. It has been used by anti-gambling campaigners to aid what they would really want to do – prohibit gambling completely, and it has been resisted by the majority of the industry to protect overheated revenues and commercial profit. Governments in their turn have bent to whichever is the strongest wind at the time. In 2013 the Gambling Commission bent to the industry and the Treasury and concluded that, “During [our] consultation, the Gambling Commission and the Responsible Gambling Strategy Board advised that a precautionary reduction in stake was unsupported by the available evidence.” In 2018 it bent to rhetorically-fuelled public opinion, even though again unable to cite any irrefutable evidence. In fact, the Regulatory Policy Commission’s own impact assessment released shortly before the FOBT ban was launched stated that, “ … whilst accepting the imminent measure [the ban] in its present form, the RPC did express some scepticism as to the preventative effectiveness of stake reduction in getting to grips with problem gambling.” Surely, it is time to open an honest debate based on rigorous non-commissioned research, allied to some Fat Tony common sense, and to kill the hyperbole.  See Nassim Taleb’s Black Swan for evidence of Fat Tony’s approach.